Board of Directors
The governing body that oversees company strategy, hires/fires the CEO, and approves major decisions.
Definition
The board of directors is the governing body responsible for overseeing the company's management and making major strategic decisions. Directors are elected by shareholders and have fiduciary duties. In startups, the board typically includes founders, investor representatives, and independent directors. The board approves budgets, executive compensation, fundraising, acquisitions, option grants, and other major corporate actions.
Why it matters
The board approves your option grants and the overall equity plan. Board composition also determines who controls major decisions about the company's future, including whether to pursue an IPO, accept an acquisition offer, or raise more capital.
Example
A post-Series B board has 5 members: the CEO (founder), another co-founder, the Series A lead, the Series B lead, and one independent director. Decisions require 3 of 5 votes. The two investors cannot outvote the others alone.